A leading packaged food manufacturer sought to improve its trade promotion spend ROI. The manufacturer’s marketing team was under pressure to increase revenues, yet required to work within the same $63 million trade budget as the previous year.
To increase sales lift without increasing promotional spend, the food manufacturer decided to explore analytics-based solutions for more effective price and promotion management strategies.
The IRI Approach
The packaged food manufacturer turned to IRI to help optimize promotional spending, product mix and pricing without adding to its fixed trade budget. IRI’s analytics team leveraged data and pricing models to return predictive results through dashboards, reports and simulations. Using IRI’s Price and Trade Advantage™ (PTA) solution, the team evaluated alternative price and promotion scenarios to determine which options would maximize ROI without increasing cost.
IRI consultants provided recommendations and advised the manufacturer on which scenarios would have the most positive impact on brand performance.
Using IRI’s PTA simulation tools and consulting services, the packaged food manufacturer identified the most effective use of its trade budget. With a deep understanding of the trade strategy’s impact on profit goals, the manufacturer rebalanced the existing spend level to fund only the most optimal marketing events. Once implemented across all key retailers, the plan yielded a large revenue lift and an incremental $15 million in operating profit.
IRI’s PTA provided the manufacturer with a valuable tool to optimize its trade budget. The company’s promotion trade dollars accounted for 14% of its operating budget, a significant amount. By simulating ever-changing marketplace conditions, PTA’s predictive analytics models recommended trade spend
strategies reflective of current commodity price levels as well as consumers’ price sensitivity and promotional fatigue. Post-promotional analyses provided detailed assessments and formed the foundation for planning trade promotions with superior returns.